Global shortage boosts potato exports

Supply issues around the globe should help U.S. fresh potato exports remain strong and create opportunities for the industry.

But the real buzz in the potato world is where hard-hit Russia will source potatoes to make up for its disastrous crop year.

Between drought and forest fires, Russia had a terrible summer, said John Toaspern, vice president of international marketing for the U.S. Potato Board, Denver.

Toaspern said most of the country’s potatoes are grown on small family farms without irrigation, so the drought left farmers with a fraction of their normal crop.

“We know it’s a short-term deal, but the fact is Russia is desperate,” said Seth Pemsler, vice president of retail and international for the Idaho Potato Commission, Eagle.

“They’re the second largest grower in the world and they’re hurting. They need potatoes.”

At the Produce Marketing Association’s Fresh Summit in October, Pemsler said he met with eight Russian companies looking to buy mass quantities of U.S. potatoes. A few weeks later, he said, there was already a container on the water.

Lee Frankel, president and chief executive officer of the United Potato Growers of America, Salt Lake City, said it will be up to the markets and transportation lanes to determine what happens next.

“It will also depend on who’s willing to to take risks in terms of extending credit and finding buyers who will pay cash on f.o.b. acceptance at a Canadian or U.S. port,” he said. “At this point, I don’t think there are a lot of firm deals.”

With Russia expected to take a lot more potatoes out of the European Union, Toaspern said there will be fewer EU potatoes for U.S. target markets in Asia. And he expects Russia will take potatoes out of China, a major U.S. competitor.

The situation in Russia and lower volumes in Europe, particularly Holland, have already given Prince Edward Island potatoes a boost.

“We’ve seen increased export activity to the Caribbean this season,” said Greg Donald, general manager of the PEI Potato Board in Charlottetown. “Our volume is up significantly relative to last year.”

“Even though we’re limited to the first (16 miles) in Mexico, our shipments to the border region are up significantly,” said executive director Jim Ehrlich.

“We probably had a 60% increase over 2008-09, when prices were higher in the U.S.,” Ehrlich said. “You have to go through a lot of hoops — I think that affected our 2008-09 shipments. We’re on track now to have another good year.”

The Eagle-based Idaho Potato Commission, meanwhile, has been expanding fresh potato sales around the globe.

“We are selling to at least 15 countries,” said Seth Pemsler, vice president of retail and international. “We have a third of the Mexican market, we’re selling across Central America and we’re shipping fresh potatoes to Hong Kong, Singapore and Malaysia, where we have a distributor with two delivery trucks designed with our logo.”The casinos of Macao are another hot market for Idaho potatoes, Pemsler said.

“Macao is now bigger than Vegas,” he said, “and the Venetian alone has 1 million square feet of convention space. All the big hotels have Western-style restaurants opened by chefs from Vegas, and they’re all asking for Idaho potatoes in restaurants like Morton’s and Ruth’s Chris (Steak House).”